Nature of Operations and Summary of Significant Accounting Policies [Text Block] | Note 1 . Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Thermo Fisher Scientific Inc. (the company or Thermo Fisher) enables customers to make the world healthier, cleaner and safer by providing analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics. Principles of Consolidation The accompanying financial statements include the accounts of the company and its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. The company accounts for investments in businesses using the equity method when it has significant influence but not control (generally between 20% and 50% ownership) and is not the primary beneficiary. Revenue Recognition and Accounts Receivable Revenue is recognized after all significant obligations have been met, collectability is probable and title has passed, which typically occurs upon shipment or delivery or completion of services. If customer-specific acceptance criteria exist, the company recognizes revenue after demonstrating adherence to the acceptance criteria. The company recognizes revenue and related costs for arrangements with multiple deliverables, such as equipment and installation, as each element is delivered or completed based upon its relative fair value. When a portion of the customer’s payment is not due until installation or other deliverable occurs, the company defers that portion of the revenue until completion of installation or transfer of the deliverable. Provisions for discounts, warranties, rebates to customers, returns and other adjustments are provided for in the period the related sales are recorded. Sales taxes, value-added taxes and certain excise taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue. Service revenues represent the company’s service offerings including clinical trial logistics, drug development and manufacturing, asset management, diagnostic testing, training, service contracts, and field service including related time and materials. Service revenues are recognized as the service is performed. Revenues for service contracts are recognized ratably over the contract period. The company records shipping and handling charges billed to customers in net sales and records shipping and handling costs in cost of product revenues for all periods presented. Accounts receivable are recorded at the invoiced amount and do not bear interest. The company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to pay amounts due. The allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in existing accounts receivable. The company determines the allowance based on the age of the receivable, the creditworthiness of the customer and any other information that is relevant to the judgment. Account balances are charged off against the allowance when the company believes it is probable the receivable will not be recovered. The company does not have any off-balance-sheet credit exposure related to customers. The changes in the allowance for doubtful accounts are as follows: Year Ended December 31, (In millions) 2017 2016 2015 Beginning Balance $ 77 $ 70 $ 74 Provision charged to expense (a) 32 16 5 Accounts written off (10 ) (9 ) (4 ) Acquisitions, currency translation and other 10 — (5 ) Ending Balance $ 109 $ 77 $ 70 (a) In 2017, includes $6 million of charges to conform the accounting policies of Patheon to the company's accounting policies. In 2016, includes $9 million of charges to conform the accounting policies of FEI to the company's accounting policies. Deferred revenue in the accompanying balance sheet consists primarily of unearned revenue on service contracts, which is recognized ratably over the terms of the contracts. The majority of the deferred revenue in the accompanying 2017 balance sheet will be recognized within one year. Warranty Obligations The company provides for the estimated cost of standard product warranties, primarily from historical information, in cost of product revenues at the time product revenue is recognized. While the company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component supplies, the company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure and supplier warranties on parts delivered to the company. Should actual product failure rates, utilization levels, material usage, service delivery costs or supplier warranties on parts differ from the company’s estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in other accrued expenses in the accompanying balance sheet. Extended warranty agreements are considered service contracts, which are discussed above. Costs of service contracts are recognized as incurred. The changes in the carrying amount of standard product warranty obligations are as follows: Year Ended December 31, December 31, (In millions) 2017 2016 Beginning Balance $ 78 $ 56 Provision charged to income 110 96 Usage (101 ) (87 ) Acquisitions — 17 Adjustments to previously provided warranties, net (4 ) (2 ) Currency translation 4 (2 ) Ending Balance $ 87 $ 78 Research and Development The company conducts research and development activities to increase its depth of capabilities in technologies, software and services. Research and development costs include employee compensation and benefits, consultants, facilities related costs, material costs, depreciation and travel. Research and development costs are expensed as incurred. Restructuring Costs Accounting for the timing and amount of termination benefits provided by the company to employees is determined based on whether: (a) the company has a substantive plan to provide such benefits, (b) the company has a written employment contract with the affected employees that includes a provision for such benefits, (c) the termination benefits are due to the occurrence of an event specified in an existing plan or agreement, or (d) the termination benefits are a one-time benefit. In certain circumstances, employee termination benefits may meet more than one of the characteristics listed above and therefore, may have individual elements that are subject to different accounting models. From time to time when executing a restructuring or exit plan, the company also incurs costs other than termination benefits, such as lease termination costs, that are not associated with or will not be incurred to generate revenues. These include costs that represent amounts under contractual obligations that exist prior to the restructuring plan communication date and will either continue after the restructuring plan is completed with no economic benefit or result in a penalty to cancel a contractual obligation. Such costs are recognized when incurred, which generally occurs at the contract termination or cease-use date but may continue over the remainder of the original contractual period. Income Taxes The company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. The financial statements reflect expected future tax consequences of uncertain tax positions that the company has taken or expects to take on a tax return presuming the taxing authorities’ full knowledge of the positions and all relevant facts, but without discounting for the time value of money (Note 7 ). Earnings per Share Basic earnings per share has been computed by dividing net income by the weighted average number of shares outstanding during the year. Except where the result would be antidilutive to income from continuing operations, diluted earnings per share has been computed using the treasury stock method for outstanding stock options and restricted units, as well as their related income tax effects (Note 8 ). Cash and Cash Equivalents Cash equivalents consists principally of money market funds, commercial paper and other marketable securities purchased with an original maturity of three months or less. These investments are carried at cost, which approximates market value. Inventories Inventories are valued at the lower of cost or net realizable value, cost being determined principally by the first-in, first-out (FIFO) method with certain of the company’s businesses utilizing the last-in, first-out (LIFO) method. The company periodically reviews quantities of inventories on hand and compares these amounts to the expected use of each product or product line. In addition, the company has certain inventory that is subject to fluctuating market pricing. The company assesses the carrying value of this inventory based on a lower of cost or net realizable value analysis. The company records a charge to cost of sales for the amount required to reduce the carrying value of inventory to net realizable value. Costs associated with the procurement of inventories, such as inbound freight charges, purchasing and receiving costs, and internal transfer costs, are included in cost of revenues in the accompanying statement of income. The components of inventories are as follows: December 31, December 31, (In millions) 2017 2016 Raw Materials $ 708 $ 466 Work in Process 505 328 Finished Goods 1,758 1,419 Inventories $ 2,971 $ 2,213 The value of inventories maintained using the LIFO method was $219 million and $207 million at December 31, 2017 and 2016 , respectively, which was below estimated replacement cost by $31 million and $28 million , respectively. Reductions to cost of revenues as a result of the liquidation of LIFO inventories were nominal during the three years ended December 31, 2017 . Property, Plant and Equipment Property, plant and equipment are recorded at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. The company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the property as follows: buildings and improvements, 25 to 40 years ; machinery and equipment (including software), 3 to 10 years ; and leasehold improvements, the shorter of the term of the lease or the life of the asset. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and the resulting gain or loss is reflected in the accompanying statement of income. Property, plant and equipment consists of the following: December 31, December 31, (In millions) 2017 2016 Land $ 401 $ 306 Buildings and Improvements 1,662 1,154 Machinery, Equipment and Leasehold Improvements 4,276 2,956 Property, Plant and Equipment, at Cost 6,339 4,416 Less: Accumulated Depreciation and Amortization 2,292 1,838 Property, Plant and Equipment, Net $ 4,047 $ 2,578 Depreciation and amortization expense of property, plant and equipment was $439 million , $380 million and $373 million in 2017 , 2016 and 2015 , respectively. Acquisition-related Intangible Assets Acquisition-related intangible assets include the costs of acquired customer relationships, product technology, tradenames and other specifically identifiable intangible assets, and are being amortized using the straight-line method over their estimated useful lives, which range from 3 to 20 years . In addition, the company has tradenames and in-process research and development that have indefinite lives and which are not amortized. The company reviews intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. Intangible assets with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate they may be impaired. Acquisition-related intangible assets are as follows: Balance at December 31, 2017 Balance at December 31, 2016 (In millions) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Definite Lived: Customer relationships $ 17,356 $ (5,902 ) $ 11,454 $ 13,167 $ (4,821 ) $ 8,346 Product technology 6,046 (2,811 ) 3,235 5,680 (2,204 ) 3,476 Tradenames 1,538 (817 ) 721 1,452 (646 ) 806 Other 34 (34 ) — 33 (33 ) — 24,974 (9,564 ) 15,410 20,332 (7,704 ) 12,628 Indefinite Lived: Tradenames 1,235 — 1,235 1,235 — 1,235 In-process research and development 39 — 39 106 — 106 1,274 — 1,274 1,341 — 1,341 Acquisition-related Intangible Assets $ 26,248 $ (9,564 ) $ 16,684 $ 21,673 $ (7,704 ) $ 13,969 The estimated future amortization expense of acquisition-related intangible assets with definite lives is as follows: (In millions) 2018 $ 1,705 2019 1,698 2020 1,609 2021 1,510 2022 1,383 2023 and Thereafter 7,505 Estimated Future Amortization Expense of Definite-lived Intangible Assets $ 15,410 Amortization of acquisition-related intangible assets was $1.59 billion , $1.38 billion and $1.31 billion in 2017 , 2016 and 2015 , respectively. Other Assets Other assets in the accompanying balance sheet include deferred tax assets, cash surrender value of life insurance, insurance recovery receivables related to product liability matters, pension assets, cost-method and available-for-sale investments, notes receivable, restricted cash and other assets. Investments for which there are not readily determinable market values are accounted for under the cost method of accounting. The company periodically evaluates the carrying value of its investments accounted for under the cost method of accounting, which provides that they are recorded at the lower of cost or estimated net realizable value. At December 31, 2017 and 2016 , the company had cost method investments with carrying amounts of $32 million and $37 million , respectively, which are included in other assets. Goodwill The company assesses goodwill for impairment annually and whenever events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Such events or circumstances generally include the occurrence of operating losses or a significant decline in earnings associated with one or more of the company’s reporting units. The company is permitted to first assess qualitative factors to determine whether the goodwill impairment test is necessary. If the qualitative assessment results in a determination that the fair value of a reporting unit is more-likely-than-not less than its carrying amount, the company performs the goodwill impairment test. The company may bypass the qualitative assessment for the reporting unit in any period and proceed directly to the goodwill impairment test. The company estimates the fair value of its reporting units by using forecasts of discounted future cash flows and peer market multiples. The company would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. Prior to the annual impairment test in the fourth quarter of 2017 and adoption of new guidance discussed elsewhere in Note 1 , if an impairment had been indicated, any excess of the carrying value over the implied fair value of goodwill would have been recorded as an operating loss. The company determined that no impairments existed in 2017 , 2016 or 2015 . The changes in the carrying amount of goodwill by segment are as follows: (In millions) Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Services Total Balance at December 31, 2015 $ 7,617 $ 2,703 $ 3,771 $ 4,737 $ 18,828 Acquisitions 619 2,059 1 14 2,693 Finalization of purchase price allocations for 2015 acquisitions — — — 7 7 Currency translation (3 ) (80 ) (108 ) (31 ) (222 ) Other 13 4 (5 ) 10 22 Balance at December 31, 2016 8,246 4,686 3,659 4,737 21,328 Acquisitions 136 99 27 3,256 3,518 Finalization of purchase price allocations for 2016 acquisitions (4 ) 68 — (1 ) 63 Currency translation 14 174 171 25 384 Other (1 ) — (1 ) (1 ) (3 ) Balance at December 31, 2017 $ 8,391 $ 5,027 $ 3,856 $ 8,016 $ 25,290 Loss Contingencies Accruals are recorded for various contingencies, including legal proceedings, environmental, workers’ compensation, product, general and auto liabilities, self-insurance and other claims that arise in the normal course of business. The accruals are based on management’s judgment, historical claims experience, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarial estimates. Additionally, the company records receivables from third-party insurers up to the amount of the loss when recovery has been determined to be probable. Liabilities acquired in acquisitions have been recorded at fair value and, as such, were discounted to present value at the dates of acquisition. Currency Translation All assets and liabilities of the company’s non-U.S. subsidiaries are translated at year-end exchange rates. Resulting translation adjustments are reflected in the "accumulated other comprehensive items" component of shareholders’ equity. Revenues and expenses are translated at average exchange rates for the year. Currency transaction (losses) gains are included in the accompanying statement of income and in aggregate were $(31) million , $19 million and $(11) million in 2017 , 2016 and 2015 , respectively. Derivative Contracts The company is exposed to certain risks relating to its ongoing business operations including changes to interest rates and currency exchange rates. The company uses derivative instruments primarily to manage currency exchange and interest rate risks. The company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Derivatives that are not designated as hedges are recorded at fair value through earnings. The company uses short-term forward and option currency exchange contracts primarily to hedge certain balance sheet and operational exposures resulting from changes in currency exchange rates, predominantly intercompany loans and cash balances that are denominated in currencies other than the functional currencies of the respective operations. The currency-exchange contracts principally hedge transactions denominated in euro, British pounds sterling, Swedish kronor, Norwegian kroner, Swiss franc and Canadian dollars. The company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. Cash flow hedges . For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Fair value hedges. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in earnings. During 2016, in connection with new debt issuances, the company entered into interest rate swap arrangements. The company includes the gain or loss on the hedged items (fixed-rate debt) in the same line item (interest expense) as the offsetting effective portion of the loss or gain on the related interest rate swaps. Net investment hedges. The company also uses foreign currency-denominated debt to partially hedge its net investments in foreign operations against adverse movements in exchange rates. The company’s euro-denominated senior notes have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments are included in currency translation adjustment within other comprehensive income and shareholders’ equity. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates were made in estimating future cash flows to assess potential impairment of assets and in determining the fair value of acquired intangible assets (Note 2 ) and the ultimate loss from abandoning leases at facilities being exited (Note 14 ). Actual results could differ from those estimates. Recent Accounting Pronouncements In February 2018, the FASB issued new guidance to allow reclassifications from accumulated other comprehensive income (AOCI) to retained earnings for certain tax effects on items within AOCI resulting from the Tax Cuts and Jobs Act of 2017 (the Tax Act). The guidance will be effective in 2019 and early adoption is permitted. The company may choose to record the reclassifications in the period of adoption or retrospectively. The company is currently evaluating the timing and method of adoption. In December 2017, the SEC staff issued guidance to address the application of accounting guidance in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act enacted on December 22, 2017. As discussed further in Note 7 , the company is reporting provisional amounts for certain income tax effects of the Tax Act for which a reasonable estimate can be determined but for which the accounting impact may change based on further analysis regarding the amount and composition of the company's historical foreign earnings and future issuance of interpretive regulations. Adjustments to provisional amounts identified during the measurement period, which may be up to December 22, 2018, will be included as adjustments to Benefit from (Provision for) Income Taxes in the period the amounts are determined. In August 2017, the FASB issued new guidance to simplify the application of hedge accounting guidance. Among other things, the new guidance will permit more hedging strategies to qualify for hedge accounting, allow for additional time to perform an initial assessment of a hedge’s effectiveness, and permit a qualitative effectiveness test for certain hedges after initial qualification. The company adopted this guidance in January 2018. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements. In March 2017, the FASB issued new guidance intended to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires the service cost component of net periodic cost be reported in the same line item(s) as other employee compensation costs and all other components of the net periodic cost be reported in the income statement below operating income. The guidance is effective for the company in 2018. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements. In January 2017, the FASB issued new guidance that eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, the new guidance requires entities to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The company adopted this guidance when it performed its annual goodwill impairment test in the fourth quarter of 2017. The adoption of this guidance did not have a material impact on the company’s consolidated financial statements. In January 2017, the FASB issued new guidance clarifying the definition of a business and providing criteria to determine when an integrated set of assets and activities is not defined as a business. The new guidance requires such integrated sets to be defined as an asset (and not a business) if substantially all of the fair value of the gross assets acquired or disposed is concentrated in a single identifiable asset or a group of similar identifiable assets. The guidance is effective for the company in 2018. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements. In October 2016, the FASB issued new guidance eliminating the deferral of the tax effects of intra-entity asset transfers. The guidance is effective for the company in 2018. The impact of this guidance will be dependent on the extent of future asset transfers which usually occur in connection with planning around acquisitions and other business structuring activities. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements. In March 2016, the FASB issued new guidance which affects the accounting for stock-based co mpensatio n. The new guidance simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The company adopted this guidance on January 1, 2017 and applied the changes to the statement of cash flows retrospectively. Adoption of this guidance decreased the company's tax provision in 2017 by $65 million and increased diluted earnings per share for the same period by $0.16 . The impact in future periods will be dependent upon changes in the company's stock price, the volume of employee stock option exercises and the timing of service- and performance-based restricted unit vesting. In February 2016, the FASB issued new guidance which requires lessees to record most leases on their balance sheets as lease liabilities, initially measured at the present value of the future lease payments, with corresponding right-of-use assets. The new guidance also sets forth new disclosure requirements related to leases. The company plans to adopt the guidance in 2019 using a modified retrospective method. The company is currently evaluating the impact this guidance will have on its consolidated financial statements, however, assets and liabilities will increase upon adoption for right-of-use assets and lease liabilities. The company’s future commitments under lease obligations are summarized in Note 10 . In January 2016, the FASB issued new guidance which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. The guidance is effective for the company in 2018. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements. In July 2015, the FASB issued new guidance which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance does not apply to inventory that is measured using last-in, first-out (LIFO). The guidance was effective for the company in 2017. Adoption of this guidance did not have a material impact on the company’s consolidated financial statements. In May 2014, the FASB issued new revenue recognition guidance which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. During 2016 and 2017, the FASB issued additional guidance and clarification, including the elimination of certain SEC Staff Guidance. The guidance is effective for the company in 2018. The company has elected to adopt this guidance through application of the modified retrospective method. The company substantially completed its analysis of the impact of the new guidance in 2017. Applying the new guidance to the majority of the company’s revenue arrangements based on its most commonly used customer terms and conditions and routine sales transactions, which generally consist of a single performance obligation to transfer promised goods or services, does not have a material impact to the company’s consolidated financial statements. While the timing of revenue recognition for some of the company’s other sales transactions has been affected by the new guidance, the impact is not expected to be material. The impact of recording the cumulative effect of the change in the accounting guidance in the company's balance sheet in the first quarter of 2018 is expected to be less than 1% of total assets, total liabilities, and total shareholders’ equity. |